Opinion: Microsoft Better Get on the Blu-ray Bus, Fast

In a response from the Microsoft run Gamerscore Blog regarding the recent news that Toshiba will be abandoning the HD-DVD format, the company writes:

We do not believe the recent reports about HD DVD will have any material impact on the Xbox 360 platform or our position in the marketplace.  As we’ve long stated, we believe it is games that sell consoles and Xbox 360 continues to have the largest next-gen games library with the most exclusives and best selling games in the industry.  We will wait until we hear from Toshiba before announcing any specific plans around the Xbox 360 HD DVD player.  HD DVD is one of the several ways we offer a high definition experience to consumers and we will continue to give consumers the choice to enjoy digital distribution of high definition movies and TV shows directly to their living room along with playback of the DVD movies they already own.

I believe Microsoft is in an extremely vulnerable position right now, and is simply trying to deflect attention from the situation while it readies a response.  The demise of HD-DVD came along extremely quickly.  In early January Warner Bros. announced they would be phasing out HD-DVD in favor of Blu-ray, followed by several other similar announcements by Netflix, Best Buy and, last week, Walmart.  In just about a month and a half, the situation went from about neutral, to a full collapse for HD-DVD.

Microsoft had long been in the HD-DVD camp, supporting it directly through the HD-DVD add-on for the Xbox 360.  However, they had stated numerous times that if Blu-ray turned out to be the winning format, they would have a solution for it.  This was likely something that Microsoft hoped to avoid, but that time has come.

With HD-DVD dead in the water, the next generation movie format has officially been determined.  Now consumers can finally make a purchasing decision without worrying about choosing the losing format.  However, where will those consumers turn?  Their choices are to get a standalone Blu-ray player (currently the lowest price one is $399) or for the same price pick up a Playstation 3 that can play both Blu-ray movies and PS3 games.  The choice seems obvious.  Suddenly Microsoft, with their Xbox 360 is left on the outside looking in.  Until they come out with a Blu-ray solution, they are extremely vulnerable.

Rumors are flying that Microsoft will have a Blu-ray addon available by May/June.   These next three months could turn the tide in the console race.